While executives at Walt Disney (DIS)
DIS, -0.88%
and America Online (AOL)
aol
said they shared the Federal Trade Commission's concern, they said self-policing by the industry was preferable. They called on their colleagues to develop responsible standards for gathering personal data, particularly from children.

"Disney has led by example, setting the standard for how a responsible company should interact with children online," said Jake Winebaum, chairman of Disney's Buena Vista Internet Group. "Disney currently follows all of the FTC's recommendations relating to the collection of personal information by children."

Reporting on a three-year privacy study,the FTC said only 14 percent of Web sites it surveyed provide notice of data collection efforts.Only 2 percent offer a comprehensive privacy policy. "Voluntary adoption of principles have not met with great success," FTC chairman Robert Pitofsky told a Washington news conference.

America Online chairman Steve Case said he welcomed the FTC report. "We hope that Web sites will use it as a catalyst to post privacy policies, give consumers the tools they need to make informed privacy choices, and stop the collection of personal information about children without parental consent," he said.

"This legislation would require Web sites to provide actual notice to the parent and obtain parental consent," he said. It would be required in cases where a site asks a child's e-mail address, if any of the information collected would be disclosed to a third party, or the provided data would enable someone to contact the child offline.

Pitofsky promised privacy recommendations regarding adults later this year."The online marketplace is unlikely to reach its full potential until consumers are confident that adequate protections are in place to protect their personal information," he said.

An association of Internet online companies praised the FTC's effort. "The Federal Trade Commission has done consumers and the Internet online industry a real service -- not only by raising awareness of privacy concerns but also by raising the bar for industry in general," said Jeff B. Richards, executive director of the Internet Services Association.

He said the ISA "has aggressively urged its members to develop, adopt and post privacy policies, and we have created guidelines." The association has recently developed an online tool kit to help companies and organizations develop privacy policies, available at www.isa.net.

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